I live in kanton Zug and in 2020 I have been paying monthly quellensteuer.
I earn quite a regular salary, however I had 2 very nice months in the year when my monthly income was CHF 30,000 (due to stock options exercise and bonus). This caused my monthly income tax rate to increase from around 5% to 20% in these months.
Is there any practical solution to flatten out my tax rate by submitting some request to assess my income on a yearly basis? And if so, would it be beneficial at all?
If your income for the year was above 120k, you have a wealth > 100k, or you had more than 2k of non taxed at source income (e.g. dividends) you shouldnât have the choice and youâll have to declare anyway (you might have to voluntarily reach out and ask for the form if youâre on the two latter cases).
Otherwise itâs up to you, but you need to do it before end of March. If you donât have a filing obligation, you can check the city tax calculator to check which one is more favorable (it depends on many things, including whether the city you live in is above or below the cantonal average).
I was in a similar situation a while ago (while on QS).
I did the calculation and additionally inquired with my HR about such an alternative.
It was
a) not possible on their accounting side (to âflattenâ the taxation throughout the year)
b) actually better off with a higher tax rate in that 1 month (of bonus payout) and lower in the remaining 11; vs. the âin-betweenâ one calculated throughout the whole year (even though logically it shouldnât matter, in practice it did)
Iâm trying to understand the rules for the tax at source (Quellensteuer) and the need / eligibility to file a tax declaration. This would be my first year doing that.
My situation:
Since the beginning of 2021 income over CHF 120â000
Tax at source is still (also now in 2022) deducted from my gross salary
Married in June 2021
Both I and my wife have a B permit
Living in canton ZĂŒrich
Could you please help me answer the following questions?
Since my yearly gross income is over CHF 120â000, why am I still paying tax at source?
Given the income amount, I have to file the tax declaration, right?
In case I donât have to file the tax declaration, should I? Iâve read some posts here that people often end up paying more, when they declare the taxes, compared to being taxed at source.
In case I have to file the tax declaration, am I supposed to get some documents for it from the canton automatically, or do I have to request it? If automatically, when should I get it? I havenât received anything yet.
The reason for deducting taxes directly from the salary is to prevent people from skipping tax payments (and leaving the country). Taxes will remain to be deducted directly from the salary as long as youâre on the B permit, as far as I know.
Yes, you will have to file an ordinary tax declaration if your gross income in 2021 was over CHF 120â000. The money that was deducted from your salary will be credited against your final tax bill. You may have to pay on top or get a refund depending on whether your final tax bill will be higher or lower than what was withheld. Keep in mind that it will likely take at least a year until you get your final tax bill.
As far as I know, you should automatically get the tax forms. However, Iâm not completely sure and donât know how quickly that usually happens. It may take a while for your employer to report the salary and for the tax authorities to process it. Maybe someone else can provide more insight or you could ask the tax authorities in your town.
You can always request an ordinary taxation with the paper form.
However the tax department seems a bit under the water with the new tax declaration.
I phoned them in Geneva and they told me they are still sending the letter with the tax declaration number.
I should receive it next week.
Thank you all for your inputs. Iâve also emailed the ZĂŒrich Tax Office with my question and this is their reply:
Quellensteuerpflichtige Personen sind - unter Vorbehalt nachstehender Ausnahmen - nicht (zusĂ€tzlich) am ordentlichen Steuerregister gefĂŒhrt und mĂŒssen auch keine SteuererklĂ€rung ausfĂŒllen.
Die Ausnahme bilden folgende Personengruppen:
1.) Ăbersteigen die der Quellensteuer unterworfenen Jahres-BruttoeinkĂŒnfte CHF 120â000 (bei unterjĂ€hriger Steuerpflicht auf ein Jahr umgerechnet), wird eine nachtrĂ€gliche Veranlagung im ordentlichen Verfahren
ĂŒber das gesamte Einkommen und Vermögen durchgefĂŒhrt.
2.) Sie verfĂŒgen ĂŒber weitere nicht der Quellensteuer unterliegende EinkĂŒnfte ĂŒber CHF 3â000 bzw. Vermögen ĂŒber CHF 80â000/Einzelperson / CHF 160â000/Ehepaare/eingetragene Partnerschaften
Wir weisen darauf hin. dass Sie in diesem Fall verpflichtet sind einen Antrag auf nachtrÀgliche ordentliche Veranlagung zu stellen.
3.) Sie möchten eine freiwillige nachtrÀgliche ordentliche Veranlagung vornehmen um abzugsfÀhige Aufwendungen geltend zu machen, welche in den Quellensteuertarifen nicht oder nur pauschal eingerechnet sind.
Dies können beispielsweise folgende AbzĂŒge sein: effektive Berufskosten (inkl. Wochenaufenthaltskosten), EinkĂ€ufe in die berufliche Vorsorge (Pensionskasse), BeitrĂ€ge an die gebundene Selbstvorsorge (SĂ€ule 3a), selbstgetragene Aus- und Weiterbildungskosten bis maximal CHF 12â000/Jahr, Kosten fĂŒr die Drittbetreuung von Kindern, Alimentenzahlungen. usw.
Unter folgendem Link kann der Antrag auf eine NachtrÀgliche Veranlagung gestellt werden.
Iâm a bit confused (my knowledge of German is not the best) - the link they provided should be for any of the 3 cases above, right? Either I have annual gross income > CHF 120â000 OR I have additional income (besides the one taxed at source) of more CHF 3â000, or total assets of more than CHF 160â000 OR I voluntarily want to file a tax return (thinking that through the tax reductions I can get to a total tax that is lower than what was deducted through tax at source). But, when I go to the link, they mention as the prerequisites for the application only 2 of those 3 cases (those two that donât apply to me, and they donât mention the income > CHF 120â000 possibility):
Voraussetzungen fĂŒr eine nachtrĂ€gliche ordentliche Veranlagung:
â Sie verfĂŒgen ĂŒber weitere nicht der Quellensteuer unterliegende EinkĂŒnfte ĂŒber CHF 3â000 bzw. Vermögen ĂŒber CHF 80â000 (bei gemeinsam steuerpflichtigen Personen CHF 160â000). Wir weisen darauf hin dass Sie in diesem Fall verpflichtet sind einen Antrag auf nachtrĂ€gliche ordentliche Veranlagung zu stellen.
â Sie möchten eine freiwillige nachtrĂ€gliche ordentliche Veranlagung vornehmen um abzugsfĂ€hige Aufwendungen geltend zu machen, welche in den Quellensteuertarifen nicht oder nur pauschal eingerechnet sind.
How do you understand this? Do I need to apply for the âNachtrĂ€gliche ordentliche Veranlagungâ?
This means that they will do it automatically, as I understand it. It may take a while.
As you can also request a switch to ordinary assessment for no particular reason (3rd case), you could still file a request. Maybe youâll get the tax declaration quicker, maybe not. However, you shouldnât be need to request it.
I donât know if itâs done automatically in every canton. For canton LU, I had to request it at the tax office, because they didnât send me anything until end of Feb 2021. Might be different for other cantons though.
I recently received the final tax bill for 2020 and 2021, with a correction where my wife & I have to pay several thousands extra, for each year. I tried to phone the authorities to understand what is the source of the extra tax - they said that the tax bracket was applied correctly, assets declared correctly, and the variation is ânormalâ, but could not explain what the source of this variation isâŠ
Does anyone know what is the source of variation between the final tax bill and the initial tax at source, since the calculation was done correctly in the first place? Or where I could find information about thisâŠ
At source uses different multipliers than the real thing (it doesnât use the city tax rate, but the cantonal average), and it can easily differ in the thousands.
Does an online tax calculator for your city/canton give you the same result as the tax authorities? If so that seems WAI.
Choose the Taxable values section and then enter your final taxable income after all deductions. This number most likely is also mentioned in your tax return.
As @nabalzbhf said, quellensteuer is using different assumptions. Your real tax liability is driven by your real residence location and also the fact that you are married. Most likely quellensteur deduction was made as âsingleâ if they didnât know income or your wife exactly
Assuming they apply the right withholding tax rate to you (you might want to search for tables and check that it is the case), the withholding tax applied to your salary is âapproximately how much a person who is married and makes X salary, living in this canton, would pay in final taxes considering their deductionsâ. So I think at high level there are 3 reasons for this estimate to be lower than the actual tax liability:
Your comune has higher tax rates than the cantonal average
You both have unusually high income (e.g. if one person has high income then their spouse on average would have it lower or no income, but you are different)
You are deducting less than an average couple (either cos you are not entitled to something or you were but you did not deduct it anyway)
Thanks - using the calculator I get a very similar number to the tax document sent by the authorities. The difference was because the tax at source applied by my employer did not take in account the salary of my spouse, so the tax bracket applied was several percentage points lower in the Quellensteuer versus the final tax assessment by the authoritiesâŠ
Great. Now everyone is happy
Tax office in CH is awesome and always gives money back if you paid too much. Normally when they ask you to pay, you actually need to pay
You should inform your employer about wifeâs salary to avoid this issue again.
Oh, I donât think this makes any difference. Once an employer knows the marital/family status of a employee, they will apply tax at source according to existing tables.
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